Steven Moerner of Pioneer: Trying again, with "more robust" systems
Ford Motor Co. has decided to broaden installation of navigation systems outside of the luxury segment. Ford has said that it will offer Pioneer systems on the 2006 Lincoln Zephyr and Mercury Mountaineer, and that other models will follow.
Steven Moerner, president of Pioneer Automotive Technologies Inc., talked last month with Staff Reporter Greg Bowens.
You have an introduction into the United States as the provider of navigation systems on Ford products. What led to that?
Pioneer launched its first aftermarket navigation system eight years ago with limited success, so we pulled back. Then three years ago we came back to the U.S. market with a more robust system and saw annual sales rise 20 to 30 percent each year for the last couple of years. We are beginning to see the emergence of a pretty significant increase in the OEM marketplace as navigation systems migrate down from luxury vehicles only into SUVs, minivans and the family sedan market.
What do you mean by a "more robust" system?
The most significant deterrent to driver use on early navigation systems was the difficulty people had operating the hardware. We are now beginning to be more intelligent in the use of soft buttons, menu screens and the use of intuitive data entry. That means dealers now can understand and demonstrate the systems better. And consumers have a better experience.
Why are audio system manufacturers getting into navigation?
This is a product category not accessible to everyone. The barriers to entry into this market are far greater than simply being able to assemble a radio or audio system. So unlike the radio market, navigation is not a commoditized segment today where the lowest price gets the most sales. Any multimedia supplier looking to drive top-line revenue recognizes navigation systems sell for much more than radios. So if you want to drive up your revenue fast, you have to get into navigation.
Pioneer navigation systems are factory-installed on several models in Japan. Will Pioneer appear on Japanese imports here?
That's our business plan.
What's going on with car radios? Will XM- or Sirius-compatible radios replace what we see in vehicles today?
I don't believe so. Just as cable television or satellite television has not replaced local broadcast, I don't envision satellite radio eclipsing traditional radio.
Pioneer has to be prepared to compete in the satellite radio market. How big do you think the market will be in five years?
The challenge is in trying to predict how well disruptive technologies do in the market. Hard drives in radios that can record and store music and portable products like iPods that make their way into cars are competing technologies that can impact the take rate for satellite radio.
Will we see Pioneer introduce a product that can record and store music off the radio?
Yes. The technology exists today, and with the advent of digital radio, you can store and play back high-quality music.